Paper short abstract:

This study aims to understand the financial literacy status of low-income earners and how this could have led to issues related to poverty in the Philippines. It also aim to find out the spending behaviour and the extent of financial discipline.

Paper long abstract:

Studies have shown that poverty deprives many decent opportunities that will enable them to live a quality life. About 26 million Filipinos are living on less than $2/day (Asian Development Bank). They are the ones who do not get quality healthcare, food, and shelter.

Families who are considered to be poor are usually observed to be those who have not availed of education and therefore, are not able to get gainful employment (Hillman & Jenker, 2004). Their vulnerability is further aggravated by the fact that they had to keep on borrowing, because they lack financial resources and financial discipline (Mylenko, 2015). It is unfortunate that, if not addressed, this state of poverty is passed on to the next generation, creating another set of vulnerable people. Their vulnerability affects their participation in proper civic, socio and economic, and spiritual activities.

This study aims to understand the financial literacy status of low-income earners and how this could have led to issues related to poverty. We likewise aim to find out the spending behaviour and the extent of financial discipline of the respondents. To execute these, the researchers will conduct a financial literacy assessment survey based on the Bangko Sentral ng Pilipinas (BSP) Financial Literacy Campaign and a Financial Literacy Campaign to students who graduated from Foundation of Professional Training, Inc. (FPTI). Such foundation offers culinary and hospitality services technical-vocational education to financially challenged female students. Moreover, literature review and observation analysis will also be included to validate the observations and results of the survey. Through these, we hope to observe and find out how the program has helped the respondents achieve financial discipline and how it has helped them improve their financial standing. It is our hope that through this campaign, we will be able to help some people get out of the poverty trap and the debt cycle.

We believe that apart from the safety nets provided by the government, the low-income earners should also find means to help themselves and improve their life. Such is the idea of capabilities approach of Amartya Sen—that is financial freedom helps people to better function and realize their potentials (Crocker, 2009). And we think that we, who form part of the Economy of Francesco, could help by offering our time in conducting financial literacy awareness and workshops.